Press Releases, 4/2/2014 | Ministry for Foreign Affairs of Finland

Finland to chair the biggest form of development assistance in Tanzania

Press release 79/2014
2.4.2014

For the first time, Finland will become the chair of the group of countries and organisations providing budget support to Tanzania on 2 April. Budget support is an essential form of development assistance, and Finland will chair the cooperation concerning it in Tanzania for one year.

“For Finland, the chairmanship is both a big challenge and an opportunity to yield much more influence than our size would normally warrant,” says Sinikka Antila, Finland’s Ambassador in Tanzania.

Finland will represent the entire group of budget support donors in the direction of the Tanzanian government. Last year, Tanzania received EUR 410 million in budget support, of which Finland accounted for EUR 11 million. From 2005 to 2012, approximately 40 per cent of the development assistance received by Tanzania was budget support.

“A recent, independent evaluation showed that budget support has significantly improved access to basic services, such as clean water and health care, and boosted economic growth. Now, for example, almost all children start school, and the girls have caught up with the boys in school attendance,” says Antila.

Budget support has also helped to strengthen the role of the Tanzanian Parliament and to enhance the operations of national auditors and the Combating of Corruption Bureau.

“The purpose of development assistance is to render itself unnecessary and to be sustainable. In Tanzania, it is of special importance to strengthen the country's own economic and governance systems, government accountability, and service provision now that gradual detachment from development aid seems to be on the horizon, as the country’s own revenues grow.”

Chairmanship at difficult times

Even though Tanzania has succeeded in improving, for example, the education level and health of its citizens, the reductions in income poverty have been smaller than expected, in rural areas in particular. There one-third of population still lives in extreme poverty and young people in particular suffer from unemployment.

“The strong economic growth of Tanzania has not created enough jobs for the growing population. During the Finnish chairmanship, we should be able to discuss even this issue openly and in a constructive tone,” Sinikka Antila points out.

Otherwise the budget support system of Tanzania has reached a turning point. The donors are expressing stronger demands for outcomes, and the share of traditional development aid of the country’s budget is falling. At the same time, new partners, such as China, have a significant presence in Tanzania.

“The forms of cooperation and interaction are undergoing a major change, and diplomacy is required to manage the situation," Antila predicts.

Budget support is a form of development aid, where the development plans of the recipient country are financed through the country’s national budget.

The support is part of the country’s national budget, which the national parliament adopts and supervises its use. Therefore, budget support strengthens the accountability between the citizens, the government and development aid.

The countries providing budget support follow the politics of the recipient country, and they also assess in collaboration with the recipient whether the objectives set for the support have been met.

The general budget support for Tanzania’s national poverty reduction programme began in 2001, and Finland has been a contributor from the very beginning.

In monetary terms, Tanzania is Finland’s biggest development cooperation partner country. In 2013, Finland contributed EUR 11 million in budget support to Tanzania, which is approximately 30 per cent of Finland’s overall support to the country.